Business travel may struggle to return to pre-pandemic levels: OBG

There are signs that a recovery is slowly under way as policymakers make concerted efforts to meet pent-up demand for leisure tourism after COVID-19 dealt a body blow to the global travel industry, Oxford Business Group (OBG) has said in its latest report.

However, the report said, business travel will take longer to recuperate, and may struggle to return to pre-pandemic levels.

Many businesses will look to formalise operational shifts prompted by the pandemic, and turn temporary measures into permanent strategies.

For example, those companies that have found they can conduct operations efficiently on a remote basis may come to see the cost of travel as an unnecessary expense.

Conferences and other business-oriented events will likewise be difficult to organise for the foreseeable future, given the ongoing necessity of social distancing. Indeed, as early as late March, the Global Association of the Exhibition Industry estimated that some 500 trade shows had been cancelled as a result of COVID-19, resulting in an estimated €23 billion in lost orders.

“Worldwide, tourism has been one of the sectors worst hit by the coronavirus pandemic. Travel restrictions and lockdown measures have effectively shut down the industry, which is both labour intensive and entirely dependent on the physical presence of guests,” the report said.

International travel fell by 80 percent year-on-year in April, according to the International Air Transport Association, while the OECD anticipates that international tourist arrivals will decline by between 60 percent and 80 percent in 2020. It seems seem that potential demand remains robust as travel website Tripadvisor recently announced that its platform has seen steady, week-on-week increases in search activity since early April.

Countries around the world are exploring what the post-coronavirus travel industry might look like.

Tourism is a key industry in many emerging economies. A majority of stimulus packages either directly targeted the sector, or put in place measures from which it benefitted, such as providing economic assistance for small and medium-sized businesses.

As conditions slowly improve, a number of emerging market governments have begun implementing measures to reboot their tourism industries.

As OBG has outlined, the initial stages of this progressive re-opening were focused on domestic tourism. Now, those countries who have been more successful at containing the virus and flattening the curve are looking to bring back international travellers.

In parallel to this, airports and airlines are working on processes to reduce the health risks associated with plane travel. These include extended use of contactless technology, more self-service kiosks and protective barriers, and ‘touchless’ screening processes.

Hygiene standards will be a top priority for travellers going forward, both in transit and at their final destination.

The provision of hand sanitisers, obligatory use of masks, frequent disinfection of public spaces, and temperature checks for guests and workers are just some of the measures that will be demanded by both travellers and authorities.

The swift implementation of health and safety protocols will enable businesses to benefit from the coming resumption of international travel.

At the same time, there is scope to expand the training of hospitality workers. Building digital skills, for example, will make them better equipped to respond to transformations in the market.

With consumers eager to enjoy their newfound liberty, the report said, increased demand for international travel is anticipated as lockdowns are eased.

As they seek affordable and accessible options, many travellers may opt for destinations in those emerging economies where labour laws are more flexible, and where tourism’s importance to GDP has prompted comprehensive efforts to make destinations safe and welcoming to foreign visitors.

There have been some encouraging signs. For example, the Radisson hotel chain recently announced it had no plans to slow down expansion in Africa, and is targeting Morocco, Egypt, Nigeria and South Africa in particular. At present the chain has just under 100 hotels in the region, a figure it aims to boost to 150 within five years.

In addition, the report said, some emerging markets are well placed to leverage an anticipated shift in consumer preferences. In the aftermath of the pandemic, more tourists will look for options that enable them to maintain social distance. City breaks, a traditionally popular travel option in Europe, are likely to lose ground to rural settings and outdoor attractions.

 

Source: Civil Aviation Authority-Qatar